1.            Your current market dynamics (key macro-environmental trends, 5-competitive

forces, critical factors of success, etc.)

Market dynamic: - The ecommerce market is dynamically changing in the past few years and
seen a trend moving towards more social, technological and eco mic trends. As people tend
toward using social media, this has raised the internet penetration and will be seen doubling in
near future. The entrepreneurial trend has also evolved and is motivating individuals to start
business online. 

Economic factors: - 

It affects the business in both positive and negative ways. Being an online marketplace daraz. Pk
is affecting by the economic factors including customers' purchasing power and the cost of
capital of company. The factors affecting the daraz.pk include economic trends, inflation etc.
The economic boom responds to the business in a positive way increasing the income and
purchasing power to buy products. As in Pakistan, the economic trend is moving towards online
purchasing that provides ease to customers, the unemployment rate is also increasing due to the
pandemic situation and the inflation rate is also increasing. In this case the daraz. Pk is focusing
on these factors with changing market trends and is keeping prices accordingly.

Technological: - 

 The technological innovation is another factor affecting the business worldwide. The online
marketplace i.e. Daraz. Pk is innovating its technology in order to compete with its competitors
and gaining competitive advantage. Daraz. Pk has introduced several new product categories like
dfresh including fresh vegetable and fruits and others more different electronic categories.daraz.
Pk has built its own logistic company as well named daraz express that has raised the industry
standard. 

Socio-cultural: - 

As the internet is affecting the lives of people. People tend towards more online purchasing that
adds ease to their busy schedule and finding ease of purchase. Daraz. Pk is focusing more on this
by fulfilling the fashion, food, appliances etc needs of its customers and also allow individuals to
sell on the daraz and make money to fulfill their employment and other physiological
needs.daraz has university where it's teachers the individual about how to run ecommerce
operations as well as give online and offline training courses as well. 

5 Competitive forces: - 

Buyers bargaining power: - Being as online marketplace daraz. Pk is offered g more product
categories with the new one including electronic, food, home, fashion product categories at one
platform. The buyers bargaining power is tend towards moderately high because the customers
are educated about the items, product information and values that they require in one click.
Customers have a lot of decisions from which they can shop and subsequently face no
exchanging cost. The value that customers are receding from daraz. Pk is high including brand,
strong customers relations, wide variety of product and services along with good price and
quality, return policy etc. This motivates buyers not going for another platform and this tends to
be high bargain power of buyers. Due to availability of more online buying options customers
finds no switching cost. On the other hand the wide variety of product categories in each
segment has decreased the customers' bargaining power to some extent. However with changing
trends more online platforms are entering the ecommerce industry bringing more value to
customers. In this case, daraz needs to be more competitive and change the strategies
accordingly. 

Bargaining power of suppliers: - It is generally moderate due to the certain conditions that the
online retailers set for their suppliers. This tends to moderate bargaining power of suppliers if
they want to bring their products on an online platform but some stores which have no inventory
or stock management system mainly rely on their suppliers just like daraz. Pk mainly depends on
its suppliers and also when suppliers are offering differentiated products, in this case the
bargaining power tends to moderate-high for daraz except for some products. However with
changing trends, daraz. Pk has rapidly grown with its innovative product categories and more
customer reach, this limits the bargaining power of its suppliers. 

Threats of new entrants: - threats of new entrants is low to moderate of daraz. Pk because new
entrants need large investments, efficient marketing strategies and competent workforce in order
to enter and compete in the market. The existing online stores i.e. Daraz. Pk already has
customers' trust, loyalty, brand name, access to raw material, permanent suppliers and strong
distribution channels that the new entrant cannot have. Other than that, the retaliation faced by
the existing players to new entrants is also a threat for their survival in the market. In this case
they have low economies of scale as they will not take cost advantage. 

Threat of substitutes: - The threat of substitutes is high in case that customer finds no switching
cost to go for another online store that is the competitor of daraz. Pk. The same customer can
also go for a physical store if the need is not satisfied or due to high prices. But in case of
offering differentiated products, good prices and quality and value added products this threat will
low i.e. Moderate in case of daraz. Pk offers a wide variety of products. 

Rivalry among existing competitors: - rivalry is high because some businesses offer a wide
variety of products, others are offering differentiated products, and while some are competing at
their pricing strategies. In this case the competition is not only high for local as well as global
online stores. The Competitive strategies including marketing campaigns, discount, pricing and
others tend to have more competition and the customer reach is increasing day by day. As every
one cannot afford such investment thus the competition is increasing also for daraz. Pk. 

Critical success factors of daraz. Pk: - 

CSFs are the factors that are necessary for the business for its success. Identifying these to
achieve mission and goals is very important. As of daraz. Pk the CSFs that daraz. Pk already has
and is trying to fulfill it to achieve its mission and goals include customer service, multiple
payment methods (cash on delivery, credit/debit, bank payments etc), multiple marketing
channels, and brand name. The success factors that are further needed to daraz. Pk for its
sustaining success should be an easy checkout process as it is necessary for customary to go
through checking items that are added in a cart.this will increase customer satisfaction, better site
performance and faster checkout. Daraz. Pk should have maintained a strong position in the
market so that the other entrants in the market will not affect daraz. Pk. Daraz. Pk should focus
on the marketing campaign that has broad reach including bottom-the - line advertising including
direct mail campaign, catalog and target search engine marketing. 

      2.    Your 2-3 key competitor’s resources, strengths and their key strategic initiatives in
the recent past (that are worrying you)

Competitors’ resources: - 

Daraz. Pks' competitors including olx. Pk, Amazon. Com, ali express.com which are providing a
variety of product categories and targeting different segments. Daraz. Pk has resources including
effective website design, computer system, efficient technical workforce, strong
telecommunication services, consumer benefit, intellectual resources including copyrights etc.
and system of receiving payments. While the competitors are having resources include, ,
computer system, workforce, intellectual resources and some are having well designed websites
but none has the effect pack of resources just like the daraz. Pk is having. In this case the
resources that the competitors have is valuable but not rare hence gaining competitive parity and
some are having temporary competitive advantage.

Competitors strengths: - 

Daraz. Pks' competitors have large profit margins as selling in broad categories e.g. Olx. Pk is
focusing on cars, bikes  along with home and fashion apparel that allow it a larger profit margin
than daraz. Pk as it includes categories like fashion, electronics, home appliances etc. Amazons'
strengths include strong brand, moderate and expanding business diversification, high capability
for rapid technological innovation especially in online services.

 1. Strong brand name – As a global e-commerce giant, Amazon has a strong position and
successful brand image in the market.

2. Brand valuation – According to Interbrand’s Global Brand Ranking 2020, Amazon is ranked
at#2 position (Apple at #1 and Google at #3), with a brand value of $200 Billion.

3. Customer oriented – Amazon provides its customers for everyday needs at inexpensive prices.
This has made it a customer-oriented brand.

4. Differentiation and Innovation – Amazon frequently brings creative ideas and innovative
additions to its product line and service offerings like ambitious drone delivery service and
Withings Aura Smart Sleep System.

5. Cost Leadership – Amazon doesn’t incur costs in maintaining physical retail stores by selling
everything online. With economies of scale, Amazon efficiently controls its costs and lowers its
inventory replenishment time.

6. Largest Merchandise Selection – Amazon has vast product categories  which attracts online
customers to make their majority of purchases from it rather than other online retailers.
7. Large number of third-party sellers – Due to the high traffic volume on Amazon’s sites, a
large number of third-party sellers have joined the platform of Amazon to sell their own
merchandise. The data from Fulfillment by Amazon (FBA) reveals that there are more than 2
billion items available from third-party sellers.

8. Go Global and Act Local strategy –  Amazon develops partnerships with local supply chain
companies that help it in competing against domestic e-commerce competitors. It understands
the local needs and provides  its services as per the country’s culture.

9. Large number of acquisitions – The successful acquisitions of Whole Foods, Zappos.com,

woot.com, Junglee.com, IMBD.com, and many others have produced a significant amount of
revenues and profits for Amazon.

10. Involved into 3 key businesses – Amazon Marketplace, Amazon Web Services (AWS), and
Amazon Prime are 3 key businesses of Amazon which work and support each other. As a whole,
they generate massive profits and advantages for the company.

11. Superior logistics and distribution systems – Amazon uses highly efficient logistics and
distribution systems. It even has fixed rates for different delivery time periods. Thus, it executes
reliable, secure, and fast delivery of goods and products to the customers.

12. Minimum pay raises to $15 per hour – Amazon is among the first companies in retail to raise
its minimum hourly pay to $15. In comparison, Target pays $12 per hour, Walmart pays $11 per
hour, and Costco pays $14 per hour.

Strategic initiatives: -   

The strategic initiative by Amazon includes numerous strategic alliances with many companies
like Evi Technologies, Thalmic Labs, Shoefitr, The Orange Chef etc. It has a strong value chain
system which also helps in maintaining a low-cost structure.The strategies like differentiation,
innovation and cost advantage also benefit Amazon to gain more profits and competitive
advantage. The partnership strategy has also added benefit to the business of Amazon as due to it
the relationship with the local supply chain is strong and they understand the culture and
customer needs. Moreover, technological innovation adds more value to its business. Olx. Pk is
focusing more on the advertising strategy including aggressive marketing through electronic
media, Twitter, Facebook as well as television, bill board. The payment strategy of olx. Pk
includes the offline payment so that it doesn't need to deal with various payment infrastructure.

      3.            Your SWOT and critical strategic issues and the greatest opportunities
including competitive threats over the next 3-5 years.

Strengths: -

 Daraz.pk is the market leader in the pakistani market.

 Maximum number of traffic of daraz.pk in pakistan.
 Acquired by multinational company i.e. Ali baba

Weaknesses: -
  Daraz.pks’ website is difficult to operate and sometimes gets slow.
 Daraz.pks’ customer feedback is not much appreciable as faced by fraud by few
customers

Opportunities: -

 Ecommerce sales are growing nowadays.

 Internet, mobile user and social media interaction of people is increasing day by day and
people are moving towards more ease to purchase products.

Threats: -

 Increase in online retailers 

 Growing number of competitors.
 Threat of substitutes is high as the customer has more options.

The website is very difficult to use and Website is very confusing and it's difficult to find the
Product. The customers' feedback about DARAZ is not good because people don't get what they
order. The quality of the product is different when it reaches the end consumer. Daraz doesn't
give what it promises.

Competitive threats are that the online competition is increasing day by day. Many retailers are
shifting online and the competition is going to be tough in the next 3-5 years with more online
stores with differentiating products and pricing strategies.

      4.            Your firm’s motivation (beliefs and values, vision, mission, goals and
objectives) and capacity to act including resources, capabilities and core competencies
(apply VRIO principles) and activities (including value chain, activity system, etc.)

Daraz.pk has developed its own core values that are linked with its mission and vision. Daraz has
never compromised on its values since its establishment.The goal of daraz is to gather every
opportunity that will help them to attain their mission by delivering their best quality services to
their customers.

Valuable:  A valuable resource is one that enables the firm to exploit an external opportunity or
an external threat that will have a positive effect on a firm's competitive advantage. Daraz.pk
resources are valuable. Daraz.pk is the largest e-com website as compared to other sites Daraz
cost is fairly low as compared to its competitors. Daraz.pk has small investors involved with it
who are selling their products through the daraz website. Daraz resources are valuable as they are
well organized in an efficient way.

Rare:   A resource is rare if the number of firms that possess it is less than the number of firms it
would require to reach a state of perfect competition.Daraz business model Is having different
shareholders who are selling on the side of daraz  at low cost and high volume as compared to
their competitors that are very rare  daraz business model is rare as compared to their competitors
and it will be difficult for its competitors to copy their business model.
Costly to imitate:   A resource is costly to imitate if firms that do not possess the resource are
unable to develop or buy the resource at a reasonable price. Daraz business model of playing
volume which in return can increase their cost. Many sellers sell their product on the behalf of
daraz but in the case of individual sellers can cause fraud so they should need to overcome this
because they can lose their customers.

Organized to capture value:  A firm must be organized to capture value that is, it must have in
place an effective organizational structure and coordinating systems. Daraz is an online retailer
whose value chain activities are different from its competitor (physical retailer).

Value chain activities: -

As Daraz.pk is an online retailer that’s why its value chain activities are slightly different from a
traditional physical retailer. The product selection of Daraz.pk involves the products that are
genuine and non-smuggled with full warranties from brands and the distributors. Seller register
himself/herself on the website and then perform the vendor management procedure. After that
the vendor management procedure includes the acquisition team that is responsible for
welcoming new sellers on the board. To sell the products, brands approach this team for
Daraz.pks’ policies and procedures including logistics, payment and return policies etc. the seller
team is also trained by this team to perform the operation of how to sell on daraz.pk. In the Seller
center of daraz.pk the product management functions include managing products, adding a
product, importing products and managing images. Then the order placement functions include
the view pending orders, view ready to ship orders, view shipped, view completed. The logistic
operations of Daraz.pk are managed by the ALGx that is the RI company. This company is
responsible for the order fulfilment of Daraz.pk. The order transportation is done by the
Daraz.pks’ own fleet that includes 45 riders through TCS and leopard services. The ordered pack
is prepared according to the sellers’ logistic model that is applied. It depends on the seller's
facility either to be prepared in daraz.pks' warehouse or elsewhere. The order is confirmed after
that then pack, pick/drop and then finally ship. The order delivery to the customer includes the
time and location of the customer. The payment is received through cash on delivery, credit/debit
card swipe on device, through easypaisa. The main infrastructure of Daraz.pk is its website
through which it operates. The website managing and its marketing include the online content
and quality that is managed by in-house content team. These services are managed by the
Portugal and Germany based RI venture. The marketing efforts are mostly through online and
social media marketing that include the online ads. The offline marketing effort is just 5% which
is very less. The after sale services include taking back the returning or rejecting order if the pack
is not open and can be able to return in 7 days. 
Daraz.pks’ primary activities include the product selection, vendor management, order
placement , logistics management, paymet, website management and marketing, after sale
services.The secondary activities include the human resources, technology development, firm
infrastructure that is its policies, rules information given to sellers, procurement, Accounting that
include sales report, accounts statement, stock accounting and pricing report

      5.            Your recommendations: what should your strategic positioning response be

for gaining competitive advantage in the next 3-5 years?

Competitive advantage refers to attributes that allow a company to produce more affordably than
competitors. It leads to superior firm performance.Our recommendations for gaining competitive
advantage in the next 3-5 years are:We will introduce three frameworks to capture competitive
advantage. The three frameworks measure and asses firm performance are:

Accounting profitability: -  

 For assessing competitive advantage we measure accounting profitability. For measuring

accounting profitability we use financial data and ratios from income statements and balance
sheets. As competitive advantage is superior performance relative to other competitors in the
same industry, a company’s manager accomplishes two critical tasks: - Accurately assess
performance of the company. Compare and benchmark their firm’s performance to other
competitors in the industry. Some of the profitability ratios that are used in strategic management
are return on invested capital, return on equity, return on assets and return on revenues.As a rule
of thumb, if a firm's return on invested capital is greater than cost of capital it generates value. If
it is less than the cost of capital, the firm destroys value.So daraz.pk should use accounting
profitability in the future to measure the firm and its competitors' performance and gain
competitive advantage.

Shareholder value creation: -  

Apply shareholder value creation to evaluate and assess competitive advantage. From the
shareholder’s perspective, return on their risk capital is the most important in measuring
competitive advantage. Risk capital is the money that is provided by shareholders in exchange
for an equity share in the company, and it cannot be recovered in case the firm goes bankrupt.For
assessing and evaluating competitive advantage of rival firms, share price development or
market capitalization is very helpful for longterm. Market capitalization captures the total market
value of a company’s total outstanding shares at a given time. So daraz.pk also uses shareholder
value creation for gaining competitive advantage.

Economic value creation: - 

 It is the difference between a buyer’s willingness to pay and the cost to produce it. The company
has competitive advantage if it creates greater economic value than competitors. Maybe greater
economic value is due to product differentiation, low cost and better quality.There are three
components that are needed for calculating competitive advantage. These components help to
explain perceived consumer benefits and economic value creation:

Value, price and cost are the components.

Value is the amount a consumer attaches to a good/service, the consumer’s maximum

willingness to pay and determined by perceived benefits provided to the buyer.The cost is
important to the supplier as compared to the consumer because it has direct bearing on the profit
margin.

Economic value created= consumer surplus +  product surplus. 

Daraz.pk should use these three for gaining competitive advantage.